I found this concerning “Z” Force in Iceland in 1940, however, these were 2nd Division troops.
“As early as 18 May 1940 the British government had suggested to Ottawa that Iceland should be garrisoned by Canadian troops. In particular, one battalion was urgently required to reinforce the 147th Brigade at that time. By June the British were requesting a full brigade of reinforcements and by July it was suggested that the entire Canadian 2nd Division should be dispatched to Iceland.
“While London clamored for more troops, Canada dispatched "Z Force" under Brigadier L.F. Page with a brigade-sized HQ staff and one infantry battalion, The Royal Regiment of Canada; those forces arrived on 16 June 1940. Two additional Canadian battalions for "Z Force", Les Fusiliers Mont-Royal and The Cameron Highlanders of Ottawa, arrived on 9 July. This brought the garrison of Iceland to the size of a composite division.
“Canada, however, preferred to concentrate its overseas army in one locale under its own command, and consequently "Z Force" was relieved within a short period of time by British forces.”
Source:
http://www.sonic.net/~bstone/history/iceland.shtml